Chapter 14 Flashcard

Front

The three essential financial statements are: Income Statement, Balance Sheet, and Cash Flow Statement

Back

Income Statement, Balance Sheet, and Cash Flow Statement

Front

The Income Statement...

Back

shows whether the difference between revenue (sales) and expenses (costs) is a profit or a loss over a given period.

Front

The Balance Sheet...

Back

shows a "snapshot" at a particular point in time of what the company has today (assets), how much it owes (liabilities), and what it is currently worth (shareholder equity).

Front

The Cash Flow Statement...

Back

tracks the movement of cash into (cash inflows) and out of (cash outflows) the company over a specific period of time.

Front

One way to help keep a positive cash flow is...

Back

collect cash as soon as possible.

Front

True or False? As long as your Income Statement is correct and checked every day, you don't really need a Balance Statement.

Back

False

Front

On the Income Statement, if revenues are greater than expenses, then...

Back

the balance will be positive, showing that the business is profitable.

Front

The basic accounting equation is...

Back

Assets = Liabilities + Shareholder Equity

Front

Assets includes...

Back

Items (tangible and intangible) a company owns that have monetary value.

Front

Liabilities are...

Back

all debts that a company has that must be paid